EPG 2019 Presentation Jean-Pascal Tricoire Chairman & CEO - - - PowerPoint PPT Presentation

Investor Relations - Schneider Electric | Page 1

EPG 2019 Presentation

Jean-Pascal Tricoire Chairman & CEO - Schneider Electric

All forward-looking statements are Schneider Electric management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking

• statements. For a detailed description of these factors and uncertainties, please refer to the section “Risk Factors” in our Annual

Registration Document (which is available on www.schneider-electric.com). Schneider Electric undertakes no obligation to publicly update or revise any of these forward-looking statements. This presentation includes information pertaining to our markets and our competitive positions therein. Such information is based

• n market data and our actual revenues in those markets for the relevant periods. We obtained this market information from

various third-party sources (industry publications, surveys, and forecasts) and our own internal estimates. We have not independently verified these third-party sources and cannot guarantee their accuracy or completeness and our internal surveys and estimates have not been verified by independent experts or other independent sources.

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Disclaimer

Schneider Electric Key figures for 2018

€26 billion

2018 revenues

137,000+

Employees in over 100 countries c.5% Revenues invested in R&D

42%

2018 revenues in new economies Transmission & Distribution Power Generation Demand/Consumers

Energy Value Chain

>90%

<10%

Our revenues More Electric + More Digital + More Distributed + More Automation IoT, Big Data, Renewables, EV, Data Centers

Industry Infrastructure Residential & Buildings IT

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We positioned the business on the optimization of the demand side

Energy Management Industrial Automation

Industry 4.0 Energy Transition

Significant Customer Benefits… ENERGY EFFICIENCY

Buildings Data Centers Infrastructure Industry

~65%

• 50%

50%

PRODUCTIVITY RELIABILITY & SAFETY SUSTAINABILITY Up to Up to Up to Aiming at (Average 30%) CapEx (integration) fewer incidents carbon emissions Serving 4 end-markets

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Our unique positioning : Energy and automation digital solutions for efficiency and sustainability

€20

billion revenues 17.8

• Adj. EBITA (%)

Energy Management

Number one for Energy efficiency and electrification

KEY TECHNOLOGIES: Medium Voltage + Low Voltage + Secure Power

Unrivalled Portfolio Depth to cover the full Power Management chain Largest Partner Network Digitally integrated within EcostruXure Power

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Energy Management

€6

billion revenues 18.0

• Adj. EBITA (%)

Industrial Automation

Process efficiency, cross selling with energy efficiency

KEY TECHNOLOGIES: Discrete Automation + Process Automation + Industrial Software

Full automation capabilities from OEM/ discrete to process Full digital asset lifecycle management with AVEVA Digital integration in EcostruXure Plant and machine

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Industrial Automation

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Our strategy is delivering (2018 figures)

€20 billion €6 billion

€26bn, +7%

Group FY 2018 revenues org.

15,1%, +50bps

Group FY 2018 org. Adj.EBITA

…delivering strong financial performance

* Including Delixi, reported under equity method since 2016

+8%

FY organic sales growth

c.+70bps

• Org. adj. EBITA

Industrial Automation Process Efficiency

+7%

FY organic sales growth*

c.+60bps

• Org. adj. EBITA

Energy Management Energy Efficiency

€4.7 billion €1.6 billion

€6.3bn, +5.9%

Group Q1 2019 revenues org.

2019 Target Reaffirmed

* Excluding panels business phase down in the U.S.

c.+4%*

Industrial Automation Process Efficiency

+7%

Energy Management Energy Efficiency

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Strong start to 2019, confirming 2018

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Our strategy has led us to be more balanced, resilient and agile

2018 Group Revenue

FY 2018 org. growth

c.29% c.28% c.16% c.27%

Orders (Internal Estimation)

Balanced across the cycle Balanced and growing across regions Agile & Flexible Software & Services growing within portfolio

% Of Group Revenue

• Multi-regional set up with proximity to

customers

• Tailored Sustainable & Connected Supply

Chain, with focus on regional manufacturing

• Flexible cost base

Variable Costs Fixed Costs Software & Services expansion ’13-’18 (c.16%) Software & Services in 2013 (circa 10%) Asia Pacific Early cycle +10% North America Mid & Late cycle +8% Western Europe +3% Rest of World +5%

Cost Of Goods Sold

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We have been and are committed to corporate social responsibility

#3 in CAC40 Leading Digital Transformation Recognized for Best Practices for Employee Share Plan Supply Chain Rankings 2018: #12 Global / #5 in Europe

Commitment for Human Rights Commitment for principles of women automomy Top 15 Respecting gender equality Performance index in gender equality Ranked by Women in India One of the best employers promoting diversity Most Ethical companies For the 9th consecutive year Commitment for circular economy #1 of global companies Commitment for sustainable and low carbon development Most sustainable companies Top 100 for the 7th consecutive year #3 global Sales towards energy transition Commitment for more renewable energy Climate Change: rated A for the 8th consecutive year Engagement in Energy efficiency Commitment for higher energy efficiency For the second year in a row One of the best employers promoting diversity Attractivity by LinkedIn One of the most attractive employers #5 globally of « SRI Leader » 397 ISR funds shareholders Recommende d by 81% of employees interviewed

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Our strategy is delivering Growth momentum continues in 2019

Strong Revenue Growth Sustained Profit Momentum Strong Shareholder Focus

Q1 18 Q4 17 Q1 17 Q2 17 Q2 18 Q3 17 Q3 18 Q4 18

7

Q1 19

3 2 3 5 6 8 5 6

More EcoStruxure More Services More Products Better Systems

Quarterly organic growth performance (%)

More EcoStruxure Higher growth than the Group in 2018 and targeted More than 2 million connected assets,+34% vs 2018

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EcoStruxure bringing value to customers across end-markets

Data Center Building Industry

EDWARDS AIR FORCE BASE

Infrastructure

Schneider Electric Exchange The first open, multi-industry ecosystem in the world devoted to solving real problems for a more efficient and more sustainable world

COLLABORATE

Meet experts and innovators for solving concrete problems and building new solutions.

SCALE

Increase business by having access to a world-wide client base

CREATE

Develop integrated efficiency solutions in every field of energy and automation management in an open ecosystem

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Our strategy is delivering

Continuous improvement of the adj. EBITA margin in past 3 years with further improvement targeted

Continued expansion of Adj. EBITA margin (%) over past 3 years, in both lower growth and higher growth environments All-time high Net Income in 2018

2019 2018

15.1

2017 2016 2015 2020

13.7 14.1

2021 Ambition

14.8 Sustained Profit Momentum Strong Revenue Growth Strong Shareholder Focus

Basic EPS 2018

€2.3bn

+9%

€4.21

+9%

+c.210bps org. Targeting +200bps (pre-FX)

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Strong focus on optimizing our portfolio and on returns to shareholders Strong Returns To Shareholders Continued Portfolio Optimization

2017 2018 2014 2015

2.4

2016

1.9 2.0 2.0 2.2

Dividend per share

• c.80% of FCF returned to shareholders in past 4 years
• Progressive dividend
• 2019-2021: initiated €1.5-2bn share buyback

Disciplined and successful M&A in the core

AVEVA, ASCO, IGE+XAO

Selective pruning of the portfolio

~€2.3bn

generated through disposals of non-core activities since 2014

Strong Shareholder Focus Strong Revenue Growth Sustained Profit Momentum +5% CAGR

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2019 Target reaffirmed

2019 Adjusted EBITA margin:

Up +20 to +50 bps organic

2019 Revenue growth:

+3% to +5% organic

2019 Target: Adj. EBITA growth between

+4% and +7% organic

Levers:

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Reaffirming our objective for the year and our Medium Term Ambition

• Reaffirming through-cycle objective of +3% to +6% organic growth in

revenues, on average

• Over the next 3 years (2019-2021), continue to focus on profitability

levers within control, with an aim to improve adj. EBITA margin by c. +200 basis points (at constant FX), assuming no major change to the current macro-economic environment

• This underlying improvement would be achieved through:
• organic growth
• portfolio optimization
• organisational simplification & efficiency
• continued productivity

Improvement of circa 200 bps (at const. FX) of Adj. EBITA margin

Portfolio Optimization Simplification And Efficiency Organic Growth Continued Productivity

Group Positioning Digital Solutions for Energy Transition & Industry 4.0 Strategy More products, More services, More software, Better systems Balanced Portfolio By geography, by end-market, from early to mid-late cycle Organic Growth Sustained growth to deliver Energy and Process efficiency Portfolio Optimization Up to €2bn of 2018 revenues to be reviewed and addressed in 3 years Continued Margin Improvement Targeting c.+200bps (constant FX) in 3 years (in a normal macro-environment) Focus On Shareholder Value Share buyback, progressive dividend, strong governance

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Key management messages…

20 May EPG Conference, Miami 21 May Berenberg Capital Goods Conference, USA 11 Jun Exane BNP Paribas European CEO Conference, Paris 13 Jun JP Morgan European Capital Goods CEO Conference, UK 26 Jun Schneider Electric Capital Markets Day, Paris 25 Jul 2019 Half Year Results 5 Sep Morgan Stanley Industrials CEO’s Unplugged Conference, London TBD Sep Update on Sustainability Topics 2 Oct Schneider Electric Innovation Summit, Barcelona 24 Oct 2019 Revenues

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Investor Relations ready to engage

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